Court decisions mean NY fracking battle could go local

May 4, 2013

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Web graphic Marcellus Shale

ALBANY — The ultimate decision on whether to allow hydraulic fracturing and shale-gas drilling in New York rests with Gov. Andrew Cuomo and his cabinet.

A pair of court rulings Thursday, however, all but ensure the battle will play out on the local level, too.

With the state Appellate Division ruling unanimously that New York's municipalities can use zoning laws to ban fracking, critics of the much-debated industrial technique say they're energized and ready to take their argument to even more town boards.

Fracking boosters, meanwhile, are preparing their next legal steps while warning about the decision’s potential consequences for an industry hoping to develop in New York.

“Well, that’s the $64,000 question — what does it mean?” said Assemblywoman Barbara Lifton, D-Ithaca, who has long pushed “home rule” for fracking.

“Would the gas companies want to drill in a patchwork way with a lot of towns carved out? I don’t know whether it works for them, but I know this restores the local control governments want and rightfully believe they have.”

Attorneys for the gas industry have warned that allowing municipalities to ban drilling would be an unworkable practice and leave their multi-million dollar investments in oil-and-gas rights subject to the whims of a town board.

But New York state has strong home rule laws regarding other industries, including sand and gravel mining, which led in part to the court's decision to uphold local governments[’ right to ban.

“In order for our state to have an effective energy policy, we have to recognize that our energy interests are different than our sand and gravel interests,” said Scott Kurkoski, a Broome County-based attorney for Jennifer Huntington, an Otsego County farmer who sued to overturn the town of Middlefield’s ban. “But at this point, it appears to us that the Court of Appeals is going to have to be the court that rules on this.”

Having the Court of Appeals — the state's high court — weigh in, however, is less than a sure bet. Since the Appellate Division’s rulings were unanimous, Kurkoski and Norse Energy Corp. would have to receive permission from the court to hear the case. (Norse, a Norwegian oil-and-gas company, sued the town of Dryden over its ban.)

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Such permission was granted to just 6.4 percent of those who requested it in 2012, according to the Court of Appeals.

The decisions again placed a spotlight on local government's role in the drilling debate. More than 150 municipalities in New York have banned fracking within their borders either temporarily or permanently since opponents of the technique began a concerted push a few years ago, though most are outside of the portion of the gas-rich Marcellus Shale believed to be most lucrative.

A few dozen other towns passed resolutions that were favorable toward fracking and in support of the state's decision-making process. Others said they were waiting for the issue to make its way through the courts.

“There were a lot of communities that were waiting to act because they were intimidated by industries threats to sue,” said Helen Slottje, one half of a husband-and-wife attorney tandem who traveled to town boards and made the legal case for bans through zoning laws. “In the absence of any contrary decisions, this is the law in the state of New York now and it provides a lot of certainty to local governments without feeling threatened by industry’s threat to sue.”

When it comes to the state Department of Environmental Conservation — which has been reviewing the environmental impacts of large-scale fracking since 2008, keeping any permits for the process on hold — the agency is forced to follow whatever the court decides, experts said.

“The DEC would have to follow the law here and — as of now, unless the Court of Appeals gets involved — it would mean they would have to honor local zoning,” said Steven Russo, a former deputy commissioner who left the agency earlier this year for law firm Greenberg Traurig LLP. “DEC's permits are by definition subject to local law, so therefore a DEC permit would be meaningless where it was zoned out.”

A DEC spokeswoman on Thursday said the agency is “reviewing the decisions.”

Meanwhile, a decision on whether high-volume fracking will be allowed at all in New York now awaits the completion of a review by the state's Health Department. Health Commissioner Nirav Shah said Wednesday there is no timetable for that review to be finalized after signaling since January it would be done in weeks.

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Some observers said the court decisions give the Cuomo administration an out. James Pardo, an attorney who counts oil-and-gas interests among his clients, said it could allow Cuomo to go ahead with fracking without completely alienating the critics of the technique who say it causes irreparable environmental harm.

“Normally, that would infuriate the other side, but in this case he can say this: ‘If there are towns and communities that don't want fracking, all they have to do is amend their zoning ordinance and they can prevent it,’” said Pardo, of McDermott, Will & Emery.

Benjamin Perkus, chairman of the Broome County-based group New York Residents Against Drilling, doesn’t think that would be right. His group, along with others opposed to fracking, have called on the state to conduct a more thorough, transparent study of shale-gas drilling’s potential health and environmental impacts.

“Our main line of public health and environmental defense in New York is that no shale-gas fracking will be permitted until comprehensive safeguards are provided,” Perkus said.